21st Mortgage to pick up $1.4 billion mfg housing portfolio
By MortgageDaily.com staff
3/23/2005

Citigroup has decided to exit the manufactured home finance market with the selling of its portfolio of related loans to 21st Mortgage Corp.

Citing its strategy of focusing on core business lines, Citigroup has agreed to sell the $1.4 billion mobile home loan portfolio for an undisclosed amount.

As a result of the transaction, the New York-headquartered company expects an after-tax loss of approximately $120 million in the first quarter.

The purchase by 21st Mortgage, of Knoxville, Tenn., follows the recent deal by its sister company Vanderbilt Mortgage and Finance Inc., which bought a $4 billion mobile home loan portfolio from Chase Home Finance and divided the servicing rights with 21st Mortgage.

The two manufactured home lenders are subsidiaries of Clayton Homes Inc., which was acquired by holding company Berkshire Hathaway in August 2003.

Citigroup, Bank of America and Chase Home's parent, JP Morgan Chase, began mobile home financing about five years ago when the business offered high yields, according to MarketWatch.

However, the strategy did not turn out profitable as expected because manufactured homes failed to hold their value as well as traditional houses, and also, borrowers of loans for such homes are reportedly more likely than traditional home borrowers to have trouble repaying.

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